Sens. Dick Durbin (D-Ill.) and Al Franken (D-Minn.) recently asked Federal Reserve Chairman Janet Yellen to provide information related to the central bank’s efforts to address vulnerabilities in payments security.
Durbin and Franken pointed to the fraud cost adjustment part of the Fed’s interchange rule and asked Yellen what the Fed has done to ensure that card issuers have policies in place to prevent fraud.
The lawmakers requested answers from Yellen before March 12. In a Feb. 12 letter to Yellen, Durbin and Franken asked Yellen to detail how many issuers receive the fraud adjustment, whether regulators keep records of policies and related notifications and how many issuers have shown their policies are “reasonably designed” to take steps against electronic fraud.
A federal appeals court has heard arguments from merchants, issuers and financial institutions over the ongoing lawsuit between the Fed and merchants regarding the debit interchange fee cap. The court could rule on the matter at any time.